Towers are bought and sold on the basis of an implied multiple of annual net cash flow as opposed to capitalization rates common elsewhere in commercial real estate. Net Cash Flow is a term of art in the tower industry and is defined as Gross Revenue minus (Insurance plus Maintenance plus Land Lease plus Real Property Taxes plus Utilities plus Monitoring). Most potential buyers in the industry will use their own historical data for similar towers and infer expenses rather than use the sellers'. The multiple is determined by a number of factors including but not limited to and in no specific order:

  1. Competitive Tower Environment
  2. Licensed Carrier Coverage at Subject Site
  3. Zoning Restrictions on the Placement of New Towers
  4. Type and Quality of Tenants
  5. Age of Tower
  6. Location and Service Objectives of Tower

SteelTree Partners evaluates each potential or existing tower individually based upon the factors listed above. SteelTree Partners then reviews the portfolio as a whole to determine whether the size and makeup of the portfolio will influence the multiple. By comparing these factors to those from other tower transactions, SteelTree Partners can arrive at the appropriate valuation and the resulting multiple.

This valuation is typically provided in the form of a "letter of opinion" assessing the value of tower assets. SteelTree Partners’ clients have used these letters to help procure funding from banks and other financial institutions. The members of SteelTree Partners have also been retained as expert witnesses in tower valuation lawsuits to provide valuation services.

If you have a portfolio of towers and are attempting to determine whether you should sell them or hold on to them, SteelTree Partners offers a free verbal valuation of your tower assets. We do not advise landowners who lease land for a tower on their property. Please contact SteelTree Partners and a member of our staff will compile the necessary data in order to complete the valuation. If you need a formal written portfolio valuation, SteelTree Partners will provide this service for a nominal fee and will gladly provide an estimate for the cost of providing a letter of opinion tailored to your specific needs.